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South America’s Most Livable Cities: Buenos Aires & Montevideo

On May 31, 2010, In competitiveness, foreign investment, lifestyle, us companies, by InvestBA
Buenos Aires and Montevideo quality of living index from Mercer

No Surprises: Buenos Aires and Montevideo were the highest ranked cities in South America.

While global mergers and acquisitions are based largely on perceived synergies and potential bottom line impact, a very human-oriented discussion typically emerges once the deal is done. Who do we send from the Home Office to manage the new foreign subsidiary? How is the quality of life there vis-a -vis the U.S.? And, of course, what is an appropriate compensation package for our soon-to-be expats?

Fortunately Mercer, a global leader in HR consulting, has the answers in their just-released 2010 Quality of Living Survey. Unlike the International Living index which focuses on variables important to retirees, the Mercer survey is designed to help multinationals fairly compensate their employees working abroad, and New York with a score of 100 is used as the base city.

The La Nacion headline came as no surprise to InvestBA readers: Buenos Aires, the best city to live in South America. In fact, out of 221 cities, Buenos Aires and our other local favorite,  Montevideo, were ranked back-to-back at #78 and #79, the two highest ranking metros in South America, followed by Santiago (#90), Brasilia (#104), Rio (#116), and Sao Paulo (#117).

For more information about investment opportunities in Argentina and Uruguay, download the new issue of InvestBA Privada.

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Real Estate Sector Posts Gains in Uruguay

On May 28, 2010, In foreign investment, real estate, uruguay, by InvestBA
Montevideo Aerial

Luxury projects are being built in Montevideo neighborhoods like Punta Carretas, Pocitos and Malvín

Earlier this month InvestBA reported on the recent gains in the Buenos Aires real estate market: closings up 37%, total value of all sales up 57% and median prices up 15%. Now the news from across the river is equally encouraging and offers more evidence of regional strength following a weak 2009 for both countries.

Uruguay’s National Statistics Institute released housing data for the first quarter of 2010, and the total number of closings is up 18% compared to 1Q09. The total dollar amount of all 15,015 real estate transactions in the first quarter of 2010 also rose 32% compared to 1Q09; yet, when adjusting from U.S. dollars to Uruguayan pesos the increase was a more modest 9.3%. (As evident on this XE.com chart, the U.S. dollar has fallen 18% against the peso over the past year.)

Looking at the most recent month of available data, the most real estate closings took place in Montevideo (34%), Maldonando (13%), Canelones (12%), Cerro Largo (6%) and Colonia (5%). The median price per square meter of all transactions in the first quarter rose 6% over 1Q09, while the Construction Cost Index (construction costs less land value) posted a modest 5% gain over 1Q09.

News was also positive for property owners in the Uruguay rental market, as average rental prices rose 6% in the first quarter to US$342. The three most expensive markets for renters were Punta Carretas, Pocitos and Malvín with median rental rates of US$418, $394 and $387, respectively. (Full Report PDF in Spanish)

For more information about investment opportunities in Uruguay including several estancias, download the new issue of InvestBA Privada and watch video tours of InvestBA listings:

Canelones Estancia – US$1,500,000

Punta del Este Citrus Estancia – US$2,500,000

La Paloma Waterfront – US$3,500,000

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Mar del Penthouse: Coastal Boom for Mar del Plata Real Estate

On May 26, 2010, In foreign investment, real estate, tourism, by InvestBA
Mar del Plata waterfront view

View from the pool deck of Maral 52, one of the luxury towers under construction in Mar del Plata.

Yesterday was an historic day here in Buenos Aires. Millions took to the streets to celebrate the 200th anniversary of the Revolution for independence from Spain.

Further down the coast in Mar del Plata, festivities were equally raucous; yet, it’s another “200″ that’s generating headlines. That’s the number of new buildings currently under construction in this seaside metropolis of 550,000 residents, according to Editorial NyP.

That ratio of new construction to population may sound out of whack until you consider the population of “Mardel” more than doubles several times during the course of the year as visitors, many from Buenos Aires, pack the local beaches. While the numbers are impressive, the housing boom enthusiasm is tempered by NyP with a closer look at real estate values which are now on par with BA neighborhoods like Palermo and Caballito.

Inland real estate values in Mardel are roughly $2,000/m² ($185/SF), while coastal values range from $2,700-4,000/m² ($250-370/SF). General consensus by those interviewed is that prices are inflated and local demand, especially from middle class Argentines who rely on bank financing, may not be adequate to absorb future inventory levels. Some Mardel projects completed during the past two years are still not 100% sold, which may give pause to developers of an additional 200 buildings currently approved.

While foreign buyers may choose to steer clear of Mardel condos, the region should not be overlooked entirely. Beautiful beach cottages and country homes in secluded forests are scattered around Mardel and offer excellent value for investors. (Full Story in Spanish)

For more information about Buenos Aires investment opportunities, download IncomeBA and the new issue of InvestBA Privada.

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SIMA 2010: The Party’s Over for Spain

On May 24, 2010, In foreign investment, lifestyle, real estate, by InvestBA
SIMA 2010

The Bull Also Rises: Argentine developers avoided SIMA like the plague this year. Ole!

Saturday’s throat goring of a bullfighter in Madrid was more than a victory for animal lovers, it was a fitting sports analogy for the state of the Spanish economy. High unemployment, a housing collapse and a tumbling Euro have many analysts referring to Spain in the same breath with Portugal, Italy and Greece, or our new favorite acronym for European countries drowning in sovereign debt, the PIGS.

Another Spanish acronym, SIMA, used to symbolize the glitz and glamor of the luxury real estate market in Spain. Hundreds of developers and thousands of buyers would descend upon Madrid each May in a second-home orgy of overpriced properties, over-eager agents and over-leveraged buyers. And while there was always a large delegation of Argentine developers at SIMA in years past, Reporte Inmobiliario says this year you can count them on one hand.

The story notes that the term “real estate bubble” was frowned upon a couple of years ago in Spain (As in, “If you don’t say it, maybe it will never happen.”), but now it’s part of the daily vernacular, Spanish developers are being squeezed by their lenders, and the speculative throng that once roamed the halls of SIMA signing multiple contracts for overseas condos has been reduced to a few bargain hunters.

Apparently the Argentine developers could see the writing on the wall and cancelled their Madrid reservations well in advance of this year’s Expo. Brazilian developers were also a no-show at this year’s SIMA, says RI, but for some strange reason the Uruguayan government chose to erect a huge booth. It’s the empty one on the attached article. (Full Story in Spanish)

For more information about Buenos Aires real estate opportunities, download IncomeBA and the new issue of InvestBA Privada.

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Buenos Aires Ad Agencies Give Global Brands Local Flavor

On May 21, 2010, In arts & entertainment, creative class, culture, lifestyle, us companies, by InvestBA
Pecsi Billboard in Buenos Aires

Have a Pecsi: BBDO Argentina tweaked the venerable brand to suit local market tongues and tastes.

The 1985 New Coke launch taught soft drink makers and marketers the risks inherent in tampering with the real thing. Amazing then, that PepsiCo green-lighted a Buenos Aires ad agency’s proposal last year to actually change the name of their world-famous brand.

The idea? Like Nike and Levi’s, Pepsi is one of those U.S. brand names that often proves problematic for native Spanish speakers. In Argentina, the pronunciation usually sounds more like “Pecsi,” so the creative minds at BBDO Argentina reasoned, why not change the name to suit local tongues and tastes? The gamble paid off.

The “Pecsi” campaign, which brought the brand closer to Argentine consumers, was just awarded the Grand Prize at the Wave Festival, the most competitive showcase of Latin American advertising creativity. Another top prize went to Argentina’s Del Campo Nazca Saatchi & Saatchi for their successful Chocolatometer campaign for Cadbury. The creative spots feature a chocolate meter mirroring female emotional reactions to romantic situations.

While positive stimulation raises the chocolate bar repeatedly, a George Costanza-like gaffe on the part of the male ultimately leaves the Chocolatometer empty. The tagline: A Man Will Never Be As Good As A Whole Cadbury. Perhaps another sign of global ad spend recovery, AdAge says there were 40% more entries at this year’s Wave Festival which just wrapped up in Rio. (Full article)

For more information about The Creative Class in Buenos Aires, visit our archives and download the new issue of InvestBA Privada.

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